Located quite close to my home and even closer to my wife’s heart, last week’s news confirming IKEA’s plans to close its Coventry store later on this year was met with slightly conflicting emotions.
It was the first from the world’s largest furniture retailer to step away from its traditional, out-of-town big-box format, in favour of providing a ‘location at the heart of an urban community’. However, in recent years the concrete colossal seems to have fallen on harder times – IKEA themselves citing the Coventry store as ‘too expensive to run’ and ‘shunned by shoppers favouring more traditional retail park IKEAs, or online shopping’.
Recently revered as ‘a powerhouse of innovative home furnishing ideas and experiential retailing’ (Forbes 2018), and ranked at #39 on their most valuable brand list last year, there’s no doubt that the IKEA experience has had a hugely positive impact on the lives of home furniture and accessory lovers. However, given recent speculation surrounding further store closes, and new, experimental formats, are the cracks in the brand’s time-served retail mould starting to show?
Taking the battle to the after-market
In 2017 IKEA acquired ‘gig-economy’ start-up TaskRabbit, the move was positioned as a strategic response to combat the scores of flourishing online competitors increasingly eroding their dominance.
By aligning TaskRabbits’s international network of decorating and home improvement services with IKEA’s growing online sales business, they have subsequently been able to bundle same-day delivery and assembly (in selected regions) into a combined service offering, initiatives that rivals such as MADE, in the UK, and international online retailer, Wayfair have been relatively slow to adopt.
For me, probably many others (think being surrounded by bits of wood and metal with only an Alun key and illustrations… no words, for deliverance) this service-offering upgrade might well be defined as ‘life-enriching’. Certainly if TaskRabbits early performance indicators are anything to go by; 100% increase in handymen jobs, of those jobs, furniture assembly increasing from 2 – 10%, then this strategic step seems to be paying dividends.
However, in this battle to dominate the after service, have IKEA been neglecting their own place, and ironically falling foul of their ‘home-shaming’ Christmas campaign of last year?
I must confess, this place ain’t blessed…
So back then to the good people of Coventry and IKEA’s city centre store format. Built over seven levels and serving as a mecca of home furnishing and accessorising ideas, the customer journey strategy employs the same principles as their out-of-town, big-box formats – the theory being that while following a zig-zag trail between displays (and in this case, levels), a disorientated IKEA customer feels compelled to pick up a few extra impulse purchases.
This method of ‘trapping’ customers in-store for as long as humanly possible has without doubt been a run-away success for IKEA over the decades – in an arena where great product, meets brilliantly inspirational product display, the Swedish firm have long been kings – our own stock-piling of tea-lights and food is staggering.
If IKEA have acknowledged a change in customer behaviour impacting on store traffic, as well as finding new and innovative ways of servicing their loyal patrons, would time also not be well spent on renewing the in-store experience?
Immersive retail experiences
Back in the spring of last year Primark set a new benchmark in fashion retailing, by effectively creating new dimensions of physical and immersive experiences that serve to support the unpredictability of the modern customer journey and demonstrate a new level of empathy for their shoppers and their (often) busy lifestyles.
While news stories again reinforce yet another example of big-name-brands exiting our High Streets, this tale is not necessarily one of doom and gloom. IKEA remain a dominant force in their sector and have also reported in news last week that despite the closing of Coventry, they intend to continue experimenting with smaller stores in city centre locations – further suggesting the roll-out of up to 30 in the next few years.
This is a good thing; it also confirms their commitment to physically reach out to a younger audience who might not otherwise easily access the bigger stores. However, as on and off-line channels continue to converge, IKEA’s big-box format needs to become more effective in reimagining what the customer journey should be.
“Like most retailers, we don’t know exactly where we will land at the end of it but our curiosity and willingness to create will be a guide for us.” – Jesper Brodin, CEO, IKEA
In our industry there will always be uncertainty around trying new things, but it’s unavoidable for those who want to survive. Brands and retailers need to develop a willingness to experiment and innovate in order to get ahead. All your efforts may not be successful; however, you’re guaranteed to pick up some valuable lessons along the way – it might just be that the Coventry store might be one of IKEA’s.
By focusing on truly holistic experiences that effect both product, interactions, as well as after-sales service, the opportunity for IKEA to inspire immersive, multi-sensory engagement on a whole new level is now.